A Family Business Built on the Family Pet

By PENNY SINGER

Published: August 28, 1994

IT'S a story straight out of Horatio Alger," said Jack R. Greenberg, describing the rise of Pet Products, a company he founded in Yonkers with his two sons 13 years ago. The company is now moving to larger quarters in Cortlandt.

"Pet Products has been profitable since Day 1," he said. "We started in business with an initial investment of $150,000, and this fiscal year, we reached $10 million in sales."

And all of it from dog treats: 220 sizes, shapes and colors of chewable beef rawhide ranging in size from the most familiar four-and-a-half-inch knotted bone up to the six-footers, which, Mr. Greenberg said, are good Christmas sellers. The rawhide can be made to look like "people food" -- slices of pizza, croissants, hamburgers complete with lettuce and tomato. The rawhide can be chopped up, colored with vegetable dye and molded into whimsical shapes like Christmas trees, complete with hanging tags for the mature dog whose teeth are not what they once were.

The company gained a share of the $500-million-a-year market in rawhide pet products by "finding a niche and mining it," Mr. Greenberg said. "Even though we were facing such giant competitors as Hartz Mountain Corporation, and although we originally started out not as manufacturers but as importers and mass distributors of other people's products, we quickly realized that in order to be successful, we had to manufacture our own line. Within a year of starting the business, we had our own factory and operation in Brazil." Starting From Scratch

Stuart Greenberg, 38 -- the company's chairman and chief executive officer who runs the company with his brother David, 36, the president -- went to a small town 1,200 miles south of Rio de Janeiro. "He managed to create a factory from scratch in an astounding five weeks' time," Jack Greenberg said. "When David and I flew down there to see the place, we were astonished to find a guard already installed at the gate of a complete manufacturing facility, which was already employing 40 people. And our first container of products was ready for shipping four and a half weeks later."

The speed and the comparative ease of getting the Brazilian operation off the ground, he added, was immeasurably helped by his own firsthand experience in Brazil.

"I had had previous exposure to working in Brazil, because in one period I had had a diversified import business, which dealt with hides from Brazil," Mr. Greenberg said. "So that part of the world -- which is gaucho country because there's so much cattle there -- was very familiar to me. I honestly doubt if we could have succeeded without import experience. But our products were a roaring success from the beginning."

The first Pet Product customer was the Shoprite supermarket chain, with about 200 outlets. "Royal Farms, with 250 stores in the New York City area followed," Mr. Greenberg said. "Both chains sold our bones under a private label. Today, we sell under private label to about 700 chains, including Target and Wal-Mart. We also sell under our own brand labels: Dog's Best, Pet Pro, Baker's Rawhide." New Customer Base

The company went public in March 1992 with an initial over-the-counter stock price of $4.25 a share. Sy Syms, who heads a chain of clothing outlets, is a longtime family friend and a major investor.

"As a result of the stock offering, we made our first acquisition eight months ago, which gives us a new customer base," Mr. Greenberg said. "We bought an old-line company, J. Narvy, an importer of rawhide based in Lindenhurst, L.I. It's now headed by the founder's son, Richard Narvy, who is currently an executive vice president in charge of production. We are looking to diversify, and Narvy also carries a line of nylon dog collars, which gives us a new opportunity to get a bigger share of what is a $4 billion annual pet market."

"Rawhide is healthy for dogs' teeth and gums," he said. "Rawhide is not like animal bone, which can splinter and cause internal problems."

Studies indicate that nationwide there are about 54 million dogs, owned by 38 percent of American households, he said. "It's a big, big market, and I estimate that we now have about 5 to 7 percent of the rawhide chew segment." Forced to Leave Yonkers

The company now employs 600 people at its factories in Brazil and another 120 employees in Yonkers.

But "our days in Yonkers are winding down," Mr. Greenberg said, somewhat sadly. "We own the building we are in, at 161 Riverdale Avenue, but we have been bursting at the seams for years. We are crammed into about 50,000 feet of space there, and we need twice that amount. We have been looking in Yonkers for ages for the kind of high-ceiling warehouse space of about 100,000 square feet, but we have come up dry."

Now the company is in the process of moving its corporate offices, distribution and packing centers to new headquarters in what was the Chase Manhattan Bank's 110,000-square-foot records building on 25 acres in Cortlandt.

"About 40 of our Yonkers employees, most of them on the management level, are moving along with us," Mr. Greenberg said, "and we've already hired 40 people in Cortlandt who have started working there." 'Gave It Our Best Shot'

Mr. Greenberg, who is a longtime resident of Yonkers, emphasized that the move out of the city came only after Pet Products was defeated at every turn in its efforts to expand there.

"Of course, I'm sorry that some of our Yonkers employees will be losing their jobs," he said. "But we gave it our best shot. For example, we tried to rent the largest unit in the Yonkers Industrial Park, which is 100,000 square feet of space, which would have been ideal for us, and it has been standing vacant for seven and a half years. But the attitude of the Port Authority officials, who own the complex, was baffling, to say the least. 'We're the Port Authority; we don't have to worry about empty space.' They were demanding 1980's rentals of $7 and $8 a square foot for space that is currently worth on the open market about $4.50 to $5 a foot."

Lloyd D. Schwalb, a Port Authority spokesman, said: "We certainly do care about renting space at the Yonkers Industrial Park. We have spent or committed some $50 million to improve the Yonkers property since we acquired it in 1984. We have been working hard with the city of Yonkers and given the size of the investment and the effort we have made to date to rent space, we have no intention of giving it away."

Mr. Schwalb added that during the past 18 months, the Port Authority has rented a total of 50,000 square feet in an old building in the park for $4.50 to $5.50 a square foot. "However, new space in a more modern building or brand-new space that we would have to build, is $7 to $8 a square foot."

Mr. Greenberg said his next attempt to stay in Yonkers, was to build on the corner of Nepperhan and Ashburton Avenues. "We thought we found an ideal site, only to run into another obstacle. The officials at City Hall turned us down because someone had a five-and-a-half-year option on the land we wanted. It's still vacant."

Mr. Greenberg said that the only person who tried to keep the company in Yonkers was its Mayor, Terence Zaleski.

"He was with us all the way," he said. "He tried everything. I know he is disappointed. But we may maintain a small crew in Yonkers, because we recently came out with a new line of pigs' ears for dogs. They're so realistic and look so much like those sold in supermarkets that we had to put a note on them that they were not fit for human consumption. We may run that operation in our Yonkers building, but Cortlandt will gain in future jobs from the expansions that we have planned."

Mr. Greenberg, 64, is now a consultant to the company. But "I am in the office every day," he said. "I enjoy the business so much that I haven't even used my boat much this summer."

Photo: People lavish money on pets, says Jack R. Greenberg, right, the founder of Pet Products of Yonkers. With him on the dog-bone assembly line is James Stamos, operations director. (Chris Maynard for The New York Times)